Whether when a Bank has purchased the property in a bid, whether the Bank then can exercise the right of a Secured Creditor to approach the Magistrate under Section 14 of SARFAESI Act, 2002 seeking assistance in taking possession of the property – The People’s Urban Co-Operative Bank Ltd. Vs. The Addl. Chief Judicial Magistrate and Anr. – Kerala High Court
In this important case, Hon’ble Kerala High Court held that it would be perfectly within the powers of the Magistrate to decide whether the property sought to be taken physical possession of is a secured asset or not. The provision of Section 14(1) of the SARFAESI Act which begins with the words “where the possession of any secured asset is required to be taken by the secured creditor”, would indicate that Section 14 can be invoked only to take physical possession of “secured asset”.
While, referring the judgments in Balkrishna Rama Tarle Vs. Phoenix ARC Pvt. Ltd. & Ors. (2022) ibclaw.in 116 SC and ITC Ltd. v. Blue Coast Hotels Ltd. and Ors. [2018] ibclaw.in 60 SC, Hon’ble High Court held that The Additional Chief Judicial Magistrate has erred in rejecting the petitions filed by the secured creditor on the ground that after purchase of property in bid, the property ceases to be a secured asset. The orders in both the writ petitions are therefore set aside.
